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The omnipresent, perpetually entertaining Dubai debate is back in full force.
Barbeque parties and meet-up dinners are again being overshadowed by the question of where the real estate market will go – up or down?
Bears are again active, saying with all their might that it is sliding into the abyss, while the bulls are waiting for the next wave to get surfing and saying, ''Get your surfing boards out as a withdrawal is just a sign of a big wave coming.''
What is interesting is that everybody is waiting for a change in the status quo.
I am taking upon myself to ask a question and answer it, too.
How long will the status quo remain?
And my opinion could be a little surprising to the tug-of-war champions who wanted to win that evening itself.
The market, in my opinion, is in for a long sideways movement this year going into 2016.
This would mean that the people who are waiting for it to go down will wait longer than they expect and the people who are waiting on the shore for a big wave will give up waiting even before the wave will actually come.
My opinion is based on certain theories.
Since it has taken a complete year for the prices to ease, I disqualify it as a bubble, which bursts or can burst. This is a clear correction in my world.
What we have in that cycle has now reached sustainable prices, which years can attract end-users and are attracting end-users, so a severe downturn looks highly unlikely.
The population growth (net immigration) in the emirate is on the rise, and as the 50-year history of Dubai has had, it is set to double in 10 years.
In light of that, the construction and supply do not bother me much since these translate to having to build as much of the city as it is today in 10 years.
We are currently witnessing several launchings, whether residential, commercial or leisure projects, in different parts of the city.
The competition among real estate developers in coming up with attractive payment schemes is expected to become the norm since a number of developers are ready with future inventory, so the incoming supply would not let the market heat up.
The market for speculators has been put to rest by the government which has implemented a number of measures that need no mention.
And a sustainable growth of a nominal nature is what could be the new character of this market.
The sideways movement will encourage value addition since that would be the only way to make investments count.
Every role in the real estate industry, whether it is being a developer, broker or investor, would go back to the drawing boards and would have to come up with innovative approaches to add value.
The new form of this market is firm.
The rouge investor mentality will leave way for more sophisticated investors and investments.
Dubai is beginning to travel now towards 2020 and the beginning is on much solid grounds.
What I see is a very committed and strong-willed effort by the government to improve the pace of its economy and growth with the milestone of 2020 in mind, and peak at the right time as that would make the Expo 2020 and its economic impact more sustainable.
In conclusion, I would like to invoke a thought for the industry, that rather than waiting for the market to change its current position in order to get back to doing what roles we were playing, we would instead need to learn to fit in at a market that will be.
Did you know that more buyers prefer to buy property in UAE with cash
Source: Ashirwad Somani, Special to Freehold
The writer is Director, Candour Real Estate